Recently, OneSpan has lauded its “record revenues” and nearly 20% year-over-year revenue growth, identifying its software license business as its “key driver” for the success. The Company has also assured investors that its internal controls over financial reporting where effective.
On August 4, 2020, OneSpan postponed its second quarter 2020 earnings release and conference call by one week, blaming the delay on prior period revenue recognition problems relating to certain software license contracts. OneSpan stated that “[t]he net contract asserts that originated from a portion of these assets in prior periods were not properly accounted for in subsequent periods, which caused overstatements of revenue.”
Then on August 11, 2020, OneSpan: (1) announced that it would not timely file its second quarter 2020 financial statement on Form 10-Q with the SEC; (2) announced that the revenue recognition problems lasted multiple years; (3) reported hat same quarter year-over-year revenues had declined; and (4) withdrew its full year 2020 earnings guidance just one quarter after reiterating it. On this news, shares of OneSpan stock fell approximately 40% on August 12, 2020.